Five associations ally to form UK Forum for Digital Currencies

Friday 13 January 2023 11:59 CET | News

Five associations have come together to form a new alliance – the UK Forum for Digital Currencies (UK FDC) – which aims to innovate the payments industry.

Members include the City of London Corporation, Digital Pound Foundation, The Payments Association, TheCityUK, and UK Finance. The aim of the alliance is to develop better policies, practice, and regulation around digital currencies.

Five associations have formed a new alliance – the UK Forum for Digital Currencies (UK FDC) – which aims to innovate the payments industry.

By combining the expertise and extended network of the five associations, the group will seek to enable a safe and secure environment for innovators to grow and attract international investment into the UK, while also helping to create a constructive bridge between the associations representing both incumbents and the emerging players in the sector. The group will aim to mitigate the actual risks and alleviate the perceived risks through education and the ability to advocate for appropriate policy and proportionate regulation.

Taking the education element further, the new collaboration aims to align the associations’ education programmes and policy advocacy with the UK’s regulatory framework and understand the operational impacts, challenges, risks, and potential solutions. This includes the development of common terminology which embraces existing definitions used in the sector into a single lexicon.

The popularity of digital currencies

Digital currencies have been gaining rapid momentum over the past few years and have the potential to change how society thinks about and uses money. While there are risks, the UK FDC recognises this growing interest and the adoption of new forms of digital money across the globe and how it will open many opportunities for the UK to remain competitive in fintech, while leading financial innovation with the right regulatory framework.

The UK FDC is a forum for discussion and collaboration around the industry’s response to digital currency developments in the UK. This includes the potential for a Central Bank Digital Currency (CBDC), as well as the regulatory approach to stablecoins and other variable value cryptoassets.

The group will also take the lead on facilitating discussion and engagement between the UK’s existing financial services industry and the crypto industry, to help to reduce barriers between them and increase mutual understanding of this complex area within financial services.

UK’s development in crypto market

Earlier in January 2023, the UK’s National Crime Agency has decided to assemble a specialised team to proactively investigate cryptocurrency-related crime.

The National Cyber Crime Unit (NCCU) Crypto Cell will initially include five officers and will support existing and new investigations that stand to benefit from specialist cryptocurrency experience. Furthermore, according to citing a recent job filing, the members of this team will be expected to adopt a proactive stance when it comes to identifying potential targets for further investigation.

Moreover, the UK has enforced a tax exemption for foreign investors purchasing crypto through local investment managers or brokers starting from January 1, 2023. The country already provides resident cryptocurrency traders with tax advice. HM Revenue and Customs released a consultation in July 2022 to get opinions from investors and industry experts on how to tax decentralized finance (DeFi). 

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Keywords: partnership, digital currency, payments , regulation, investment
Categories: Banking & Fintech
Countries: United Kingdom
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